To reduce the unemployment margin, it is pertinent to recall that the Federal Government’s effort to engage many Nigerians in small and medium enterprises has been a major concern over the years… With the approval of tax breaks for startups , more innovators can take advantage of this incentive to create and grow profitable technology companies that will create jobs.

On May 18, the federal government announced the approval of tax breaks for tech startups nationwide. The news gave Eddy Emmanuel and many other young innovators and entrepreneurs looking for opportunities to improve their innovations a euphoric feeling.

The approval will enable the implementation of strategies to encourage and support the development and growth of more innovation-driven enterprises (FDI) in the country.

Emanuel, who studied animal husbandry, developed a platform for community engagement in grazing, trading and live-breeding to eliminate open grazing, which had led to conflict between herders and farmers. This turned into relentless attacks by so-called “unknown gunmen”, causing chaos in some communities in Nigeria.

Undoubtedly, the introduction of these tax breaks will give it the resources to fearlessly introduce more Nigerians into its improved and cost-effective digital grazing system.

Bright Ubani and Uzor Chigozie Joshua, two pioneers who created a digital platform called Level Up, are also happy with the tax relief initiative. The goal of their platform is to promote a culture of free job training among young people across the country. They started a community-to-community training initiative, but were stymied by taxes, which frustrated their efforts to contribute positively to their communities.

Similarly, Lade Omoremi, an aspiring waste recycling innovator, lamented that taxes have discouraged her from nurturing her innovation into a profitable startup that will be of great benefit to her community.

Startups are organizations or projects in their early stages, which are created by entrepreneurs to find, develop and validate scalable business models. But startups in Nigeria are often overwhelmed with multiple taxes and levies when they venture out to seek investors or start operations.

…SMEs should be aware that there are tax exemptions for small businesses with an annual turnover of less than N25 million. Startups in their early stages should be aware that a lower corporate income tax rate of 20% is granted to companies with annual turnover between 25 and 100 million naira.

As a key driver of progress in developing countries, startups help improve the standard of living of local people by introducing them to new technologies and attracting foreign investment, as well as enabling local innovators to solve local problems. with their innovations.

To reduce the unemployment margin, it is pertinent to recall that the Federal Government’s effort to engage many Nigerians in small and medium enterprises has been a major concern over the years.

With the approval of startup tax breaks, more innovators will be able to take advantage of this incentive to start and grow profitable tech companies that will create jobs.

For example, startups like Carbon, Jumia, Konga and others have helped create over 3,000 direct jobs in the country. According to Jobberman’s Digital Sector Report 2020, Nigeria’s digital economy has the potential to create an average of 1.3 million tech jobs across all sectors by 2025, and the tax relief program will facilitate the realization of this prediction.

Yet many people are unaware of the extent of tax breaks and incentives available due to the lack of awareness campaign.

As such, SMEs should note that there are tax exemptions for small businesses with an annual turnover of less than N25 million. Startups in their early stages should be aware that a lower corporate income tax rate of 20% is granted to companies with annual turnover between 25 and 100 million naira.

The National Information Technology Development Agency (NITDA) is to develop a comprehensive outreach program to enlighten startups on available tax breaks and how to easily access these incentives.

There are various incentives for investors and startups involved in venture capital projects. Eligible startups benefit from capital allowances of up to 30% on equity investments made by venture capitalists, as well as a capital gains tax exemption of up to 100% when selling a stake.

Additionally, in an effort to encourage the growth of the startup ecosystem, the federal government has mandated companies to do business with startups on projects involving the central government or any of its agencies to enable them to thrive. locally and internationally.

Most struggling startups believe that this tax relief package will allow them to revive and redefine their strategies to become viable businesses capable of thriving and growing.

The National Information Technology Development Agency (NITDA) is to develop a comprehensive outreach program to enlighten startups on available tax breaks and how to easily access these incentives.

Similarly, organizations such as the National Office for the Acquisition and Promotion of Technology (NOTAP), the Nigerian Investment Promotion Commission (NIPC) and others should partner with NITDA for the effective implementation of these tax breaks.

Such a collective approach would stimulate more local innovators and stimulate the growth of startup ecosystems to support Nigeria’s thriving digital economy.

Zeenat O. Sambo writes from Abuja.